Can I leave the grid now please?

This last couple of years has tested a lot of us in small business. Cafes and restaurants have had to pivot into whole new areas as a result of various mandated restrictions imposed from on high. Some have emerged relatively unscathed, while others have had to call it a day. Businesses which rely on the free movement of people also suffered. Tourism and teaching businesses like mine were just two of the casualties.

I was unable to run workshops for the better part of 2 years due to the ongoing threat of lockdowns and various border closures. I know of many local operators who have relied on steady flows of tourists to build their businesses, who have had to either hibernate or move on. Some are emerging from this hibernation now, still viable, but without a whole lot to show for a couple of years of unplanned disruption.

I’m not going to debate whether any of this was necessary, or whether it was an effective approach to dealing with the flu. Economic reality is my focus here. When small business suffers, the long term consequences are felt by everyone, especially in a small community.

And dire economic consequences are the legacy of a couple of years of all this. Now, however, we have a whole new raft of issues to deal with, and these are potentially bigger than the ones we have had throughout this extended flu season.

I’m talking about energy and fuel prices. As of last week, electricity prices for the past quarter from my supplier have gone up by 25%. Fuel prices have increased by between 30 and 50 percent. In other countries, energy price hikes have been even more dramatic, and I’m told that here in Australia we will be facing more price hikes over the coming months. We have already seen massive increases in the price of gas over an extended period, as the previous government thought it would be a great idea to sell off all of our plentiful gas supplies to the highest bidder, and save none for domestic consumption.

If you are a bakery, you might have thought you’d survived the whole pandemic intact, but if your energy and fuel costs have gone through the roof, it’s only a matter of time before the bills start scaring you out of any kind of post pandemic slumber.

Bakeries are without a doubt one of the most energy intensive businesses - the simple fact is that we heat up ovens on a daily basis to bake bread, and this heat is proving to be very expensive to make. We also require energy for refrigeration, and in many cases fuel for transporting our wares. We also are paying extra for flour, as it has to be carried long distances and is affected by these increased fuel costs.

Meanwhile, energy and fuel companies are making record profits. These price increases are not the result of a supply issue, they are to do with our international market systems. A market will very quickly capitalise on disruption, if for no other reason than to preserve or improve the bottom line or market share. We are seeing the very worst of the monopoly focused capital system play out, and many of us will hit the wall as a result - especially those who are ill prepared for these changes.

Early days with Luna

I saw the future many years ago. For my bakery, energy prices jumping suddenly has not been such a dramatic issue. I’ve been heating my oven with waste fuel (timber) for the past 12 years. In my case, my oven can run on sawmill offcut, tree fall or even old pallets. I run my oven a certain amount of the time using biochar, created from waste bread also. This past few years I’ve dived deep into the process of making ovens as well as using them, and so I’ve had the opportunity to experiment with ways of making them run more cleanly, and to get the most out of the wood. The latest prototype from my micro setup has incorporated a naturally aspirated gasification system into the firebox design, which, when running hot, emits virtually no smoke at all. The smoke actually gets burned, creating more and cleaner heat.

On a larger scale, all around the world oven manufacturers are developing cleaner and less expensive ways to heat ovens. In Europe, many old diesel powered ovens have been converted to run on wood pellets, which themselves come from waste material. However, for the average baker in Australia, the capital cost of converting from electric or gas ovens to this biomass technology is beyond their reach.

Old style shopping centre bakeries, operated by a franchisee or family, will need to find ways to pass on these cost increases, and hopefully they can convince their customers that the price of a loaf of bread will have to go up on a fairly regular basis until all this volatility settles down. I’m not sure that all of them will be able to do this, and I anticipate many will go under.

I’ve been helping new bakers to set themselves up as ‘off the grid’ as possible for many years now. All of these bakeries are holding their own at the moment - indeed, many are thriving in their local communities. They all report having to deal with a number of increases to input costs, and yet as a result of using wood fired ovens and the like, these bakeries will whether the energy storm better than most.

But being ‘off the grid’ can be leveraged in other ways, and the definition doesn’t need to be strictly associated with the energy grid. More and more people are seeing the cataclysmic events unfolding in front of us each year as a directive to detach from the system in as many ways as they can. I’m going to call this ‘off the grid thinking’ - in other words, how one can remove oneself from the established system. To do this, it is imperative that we create new systems, which in the end are more directly linked to their customers.

‘Off the grid thinking’ can involve new ways of providing one’s services or products which circumvent or reinvent traditional ways of selling one’s wares. For example, many bakeries once relied on being in a good location to get retail price for their bread. This was once an almost foolproof way to get your bread out there. Now, with main street rents rising every year, the price of retail space is becoming more and more out of reach for the small operator. Only corporate entities with share market support can afford the prime locations. This has led to many bakeries setting up on the edge of small population centers, and they are supplying their bread via subscription systems directly to their customers. Many others are setting up at home, opening up their ‘retail’ from their front porch, and, via the use of social media or email, promote their offerings to fit with their customers weekly routine. Still others focus on a variety of weekend markets to sell their wares. All of these strategies are examples of different ways of doing things, and for many they are proving to be viable and satisfying.

Tiff, from Bread Local in Esperance, has her shop in her front yard every Friday!

There are bakeries who specialise in using their own produce as ingredients in their baked goods too. I know of a farm based bakery who use almost all their eggs and some of their vegetable production in their products. I have a number of clients who mill their own flour to create their bread. I have helped cafe owners to modify their setup in order to bake in house, thereby reducing their input cost. I even have one client who grows their own wheat, mills it and uses the flour in their bread!

To my mind, these are all ‘off the grid’ ways of doing things. These different approaches to the age old craft of baking for one’s community are showing that resilience is the name of the game, and a bit of imagination and some decent research can really make the difference between making it work and giving up because things are out of your control.

I’ve focused on the commercial side of things in this article, as these energy price hikes are effecting us small business operators in very direct ways. However, plenty of home bakers are doing the same thing, and indeed, there is becoming a large overlap between home and professional baker.

I run regular 2, 3 and 4 day intensive workshops for anyone who wants to get serious about their baking business and lifestyle. Don’t hesitate to give me a call or email me on the address at the bottom of this page. Or you can check out just what’s on offer on the link below.

If you’d like to chat about the next step, why not ring me on 0409 480 750? I’ll be able to make some suggestions as to what I think might help you in taking the next step. I’m also very happy to provide mentorship on your individual bakery journey.